Your Down Payment

Lots of folks who are looking to buy a new house can qualify for a mortgage loan, but they can't afford a large down payment. Here are a few straightforward ways to get together a down payment

Tighten your belt and save. Look for ways you can trim your monthly expenditures to set aside money for a down payment. You also might enroll in an automatic savings plan to automatically have a set portion of your paycheck moved into a savings account. Some practical strategies to put together funds include moving into less expensive housing, and staying home for your family vacation for a year or two.

Work more and sell items you don't need. Maybe you can get a second job and save your earnings. Additionally, you can make a comprehensive list of items you may be able to sell. Unused gold jewelry can bring a good price from local jewelers. You might own desirable items you can sell on an auction website, or quality household items for a garage or tag sale. You might also research what any investments you own could bring if sold.

Borrow from retirement funds. Investigate the parameters of your particular plan. Many homebuyers get down payment money by withdrawing from their IRAs or borrowing from 401(k) plans. Be sure you are knowledgable about any penalties, the effect this will have on your income taxes, and repayment terms.

Ask for help from generous family members. First-time homebuyers are often fortunate enough to receive help with their down payment help from giving parents and other family members who may be eager to help them get into their first home. Your family members may be willing to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies provide special mortgate loan programs- for low and moderate-income buyers, buyers with an interest in renovating a house within a specific area, and additional groups as defined by each finance agency. Financing with this kind of agency, you can be given a below market interest rate, down payment assistance and other benefits. These types of agencies can assist eligible homebuyers with a reduced rate of interest, help with your down payment, and offer other assistance. The central purpose of not-for-profit housing finance agencies is build up the purchase of homes in particular parts of the city.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low and moderate-income individuals get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling new homebuyers who will not be eligible for a typical mortgage, to get a mortgage. Down payment amounts for FHA loans are less than those with traditional mortgages, even though these loans hold current interest rates. Closing costs might be included in the mortgage, and the down payment may be as low as 3% of the total.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a low fixed interest rate, no down payment, and reduced closing costs. While the loans are not actually financed by the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You can fund a down payment through a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the purchase price, and the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to lend you some of his own equity to help you get your down payment funds. You would finance the largest portion of the purchase price with a traditional mortgage lending institution and borrow the remaining amount from the seller. Usually this form of second mortgage has higher interest.

No matter your strategy of getting together down payment money, the thrill of reaching the goal of owning your own home will be just as sweet!

Want to discuss your down payment? Call us at 407-834-3377.

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